Court order makes it easier for Gianforte to suspend PSC President Brad Molnar

A judge in Helena issued an order late last week that will make it easier for Gov. Greg Gianforte to remove Brad Molnar, at least temporarily, from his post on the Public Service Commission.

Lewis and Clark County District Court Judge Mike Menahan on Friday restored Gianforte’s ability to suspend Molnar, who is under investigation for workplace misconduct. The investigation has roiled the PSC, the elected utility board that regulates shareholder-owned companies such as NorthWestern Energy to balance their financial health with the concerns of their customers, who can’t shop around for service from other utilities.

During a heated meeting last month, PSC Vice President Jennifer Fielder and PSC Executive Director Alana Lake argued that Molnar had harassed agency employees and demonstrated discriminatory and retaliatory behavior. This summer, members of a “rapid response team” initiated an inquiry into Molnar’s behavior and accused Molnar of thwarting their attempts to investigate the allegations made against him. 

Molnar has argued that the allegations against him amount to hearsay — not enough to meet the “good cause” threshold for suspending a sitting commissioner from the all-Republican commission. He’s also argued that other commissioners are seeking his ouster to help NorthWestern Energy achieve its agenda, which includes an $874 million rate hike request currently in review and a $3.6 billion merger with Black Hills Corp., a South Dakota-based company, that will also undergo PSC scrutiny.

In August, Fielder sent a letter to Gianforte, a Republican, seeking Molnar’s removal from office. The following month, Molnar countered with a lawsuit to block the effort. He maintained that allowing the suspension to go forward amounts to the “overturning of an election” for personality conflicts at best and political ends at worst. Menahan sided with Molnar in a Sept. 4 order granting his request for a temporary restraining order. 

In that order, Menahan argued that there are “procedural safeguards” in place that Fielder had thwarted and allowing Molnar’s removal by Gianforte would “create a dangerous precedent for circumventing democratic processes.” Menahan also noted that the letter was sent within 24 hours of NorthWestern’s proposed merger with Black Hills Corp., finding that it “raises serious concerns about the complaint’s true purpose and threatens both democratic institutions and the public’s interest in thorough utility regulation.”

In his Oct. 10 order lifting the restraining order, Menahan wrote that there is a low bar for investigating complaints — the trigger that allows Gianforte to suspend a sitting commissioner. He noted that “good cause” can include “failure to satisfactorily perform job duties,” “disruption of the employer’s operation,” or “material or repeated violation” of an employer’s written policies. He also expressed concern that Molnar “will continue to impede the internal investigation into the complaints regarding his alleged misconduct.”

Menahan found that the governor has a responsibility to investigate the complaint made against Molnar — and that Molnar has a “corresponding duty to cooperate in the investigation.”

In a Monday afternoon phone call with Montana Free Press, Molnar said he is concerned about the precedent the order sets by establishing such a low bar for a commissioner’s suspension.  

“There’s no rule of evidence, there’s no due process,” he said. “It makes it absolutely easy for Gianforte to suspend anybody.”

Molnar added that allowing the governor to appoint a replacement commissioner weakens the commission’s independence.

In an email to MTFP, Gianforte spokesperson Kaitlin Price echoed the governor’s earlier stance, writing that “the governor’s office is committed to an impartial review” under state law governing the removal or suspicion of a sitting member of the PSC. She did not respond to a follow-up question about the status of the investigation. Lake, the PSC’s executive director, did not respond to MTFP’s emailed questions by press time Wednesday afternoon.

In a Monday morning interview with MTFP, Matthew Monforton, Molnar’s lawyer, said both parties’ arguments in the litigation have remained essentially the same in the weeks since Menahan issued his order granting the temporary restraining order.

“Commissioner Fielder’s case against Commissioner Molnar was just as meritless last week as it was a month ago,” Manforton said. “We believe the court erred in not extending the injunction.”

Monforton added that while there isn’t a previously decided case that aligns closely with this one, all of the parties in the litigation are in agreement about the process moving forward. If Gianforte wants to suspend Molnar while the investigation is underway, he’ll have to show “good cause,” under a law specific to the PSC. Montforton said that in order to permanently remove Molnar, a criminal conviction for “official misconduct” is required. Criminal misconduct involves “purposely or negligently” failing to perform mandatory duties, knowingly breaking the law while working in an official capacity, or attempting to “obtain a personal advantage” for oneself or another, among other items.

The order puts “Gianforte and the big utilities are one step closer to completely hijacking the PSC from Montana voters,” Monforton wrote in an email to MTFP. If Gianforte decides to remove Molnar, “he will own the resulting utility rate increases,” he added.

In a Monday afternoon conversation with MTFP, Fielder said she “looks forward to seeing what the governor decides to do” with Menahan’s order.

“I think the court spoke loud and clear that, yes, the internal policies of the agency … do apply to the members of the commission,” she said, adding that she’s not speaking for other members of the PSC. “To me, what that signifies is that the days of unaccountability at the PSC are finally over.” 

The commission has undergone intense public, judicial and legislative scrutiny in recent years amid political infighting, staff turnover, inadequate financial controls and office culture issues. Agency dysfunction has come with a financial cost: In the past three years, the state has paid $330,000 to settle two lawsuits filed by former agency employees over claims related to wrongful termination and privacy violations.

In other PSC news, Molnar is expected to introduce a motion at the Oct. 14 PSC meeting rejecting a rate hike settlement that NorthWestern crafted with the Montana Consumer Counsel and about a dozen of the utility’s largest customers. 

If Molnar is successful in his motion, the PSC will review NorthWestern’s books and investments from scratch to determine what constitutes “just and reasonable rates” for its transmission infrastructure and its new gas plant in Laurel. The move is a departure from the agency’s approach to setting NorthWestern’s rates in recent years. The commission has relied heavily on proposals forwarded by NorthWestern, the Montana Consumer Counsel and a handful of NorthWestern’s largest customers.

On Oct. 21, the agency will discuss a motion from Fielder that would make it easier for commissioners to bring one another to Gianforte’s office for potential suspension. If Fielder’s motion passes, it will lower the vote threshold for a gubernatorial review from four commissioners to three commissioners. It would also make it easier for the commission to undo officer elections. 

“It doesn’t allow the commissioner to remove a public official from public office by any means, but it does make it a little bit easier to hold people accountable,” Fielder said of her proposed changes.

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